Lean production supply chain management

as driver towards enhancing product

quality and business performance
Case study of manufacturing companies
in Malaysia
-Arawati Agus

Muhammad Asad
Faraz Khetran
Ahsan Rasheed
Purpose

▪ Better understanding of the extent to which lean production

permeates manufacturing companies in Malaysia
Research Questions

▪ Production indicators that are correlated to lean production

practices?
▪ Which lean production variables do have a significant impact on
quality and business performances?
Objective

▪ (1) Correlations between lean production and performance.

▪ (2 Assess the importance of each lean production indicator on
performance.
▪ (3) Whether lean production have significant impact on PQP.
▪ (4) Whether lean production have significant impact on business
performance.
▪ (5) Whether there is a direct effect of PQP on business performance.
Sample Size

▪ Malaysian manufacturing companies listed in the Federation of

Malaysian Manufacturers directory. From the 300 companies
sampled, 200 responses were completed, representing a 67 per cent
response rate.
Conceptual Model
Hypothesis

▪ H1. Lean production has a positive structural effect on PQP.

▪ H2. Lean production has a positive structural effect on business performance
(BPERF).
▪ H3. PQP has a positive structural effect on business performance (BPERF).
▪ H1A. Reduced setup time has a positive structural loading on lean production.
▪ H1B. Continuous improvement programs have positive structural loading on lean
production.
▪ H1C. Pull production system has a positive structural loading on lean production.
▪ H1D. Shorter lead time has a positive structural loading on lean production.
▪ H1E. Small lot size has a positive structural loading on lean production.
▪ H0. The overall hypothesized model has a good fit.
Pearson Correlation
Structural equation modeling
Malaysian lean production index

▪ It checks Implementation of lean production in Malaysia.

▪ The result: MLPI = 67.21.
▪ A score of 67.21 on the MLPI for the manufacturing industry can be
considered moderate but above average.
▪ More should be done.
Findings

▪ Continuous improvement program and small lot sizes have positive

and direct effects on PQP.
▪ Lean production has positive but significant indirect effect on
business performance through PQP.
▪ PQP has positive and direct effect on business performance.
▪ The MLPI of 67.21 indicates that more should be done by
manufacturing companies in Malaysia.
Practical Implication

▪ It suggests what factors should be emphasized in lean production.

THANK YOU